Legislature(1999 - 2000)
02/16/2000 01:40 PM House FIN
Audio | Topic |
---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 116 An Act relating to the Board of Agriculture and Conservation, to the agricultural revolving loan fund, to the disposal of state agricultural land, and to the Alaska Natural Resource Conservation and Development Board; and providing for an effective date. REPRESENTATVE JEANNETTE JAMES noted that HB 116 was the culmination of much intensive work by representatives from the Legislature, the Administration, conservation boards and the agriculture industry. She stated that HB 116 would propose a new board, the Board of Agriculture and Conservation, comprised of the Commissioner of Department of Natural Resources plus seven people involved in grass-roots commercial production agriculture. The legislation would extend the life of the Agriculture Revolving Loan Fund (ARLF) by instituting grass roots fiscally conservation board that would have more control over the Alaska Revolving Loan Fund. HB 116 would make the ARLF interest rate competitive with other loaning institutions which are currently drawing farmers away and shortening the life and income of the ARLF. Representative James noted that HB 116 would allow flexibility for the new board to restructure loans in the event of a disaster, and it would strengthen the emergency loan program. Representative James added that the bill would assure that the board would be consulted prior to any disposal of agricultural land. The new board would take over statutory duties of the existing Division of Agriculture and would hire an executive director. She believed that would mean a predictable continuity for that position. She urged the Committee's support of the legislation. Representative James acknowledged that the interest rate issue had been addressed in a separate piece of legislation that has already passed out of the House Finance Committee. Representative James emphasized that it is imperative HB 166 accompany that legislation. She pointed out that all the land sale decisions would be left in the bill. Representative James spoke to the fiscal note. She pointed out that the $9 thousand dollars travel component had been determined by Department of Natural Resources. The Department noted that in creating a new board, there initially would need to be more meetings to establish regulations. She explained the funding would come from the ARLF. She suggested that the board and the Creamery Corporation would offset some of those costs. The creamery funds are not listed on the note. Representative James stated that additionally, there exists an assumption that the change would result in a reduction in revenue from the interest rate. She assumed that interest rate reductions would result in new loans. Currently, the interest rates are higher than most other loan companies, which keeps them from being competitive. She disagreed with the idea of a change to revenues. Co-Chair Therriault commented on the loss of revenue. He noted that in the proposed committee substitute, the changes would conform the loan provisions included in HB 116 with the Committee's work done on Representative Harris' bill. Co-Chair Mulder MOVED to adopt the work draft committee substitute, 1-LS0407\T, Cook, 2/15/00, as the version of the bill before the Committee. There being NO OBJECTION, it was adopted. Co-Chair Therriault referenced the fiscal note. He pointed out that the sponsor statement indicates that the new board would take over the duties and responsibilities of the Division. He asked if it was the intent that the board takes over "all the responsibilities" of that agency. He advised that some of those obligations were specified in statute. Representative James replied that through the legislation, the board would be making the decisions currently made by the Director of Agriculture. She commented that if the Department wanted to change the direction of the Division, that would be their prerogative. The authority given by the Division of Agriculture, which would be managed by a board of directors, would be the hiring of a director as opposed to the advising of a director. Representative James commented that the board has a job to do and a lot of decision making associated with performing that work. The intent of the legislation is to keep the direction going in a forward movement. The purpose of the legislation is to place the regulation and policy power in the hands of the Board of Agriculture. They would implement policies through the statutory authority given to them. Co-Chair Therriault spoke to the duties assigned to the Division of Agriculture. He noted the "vested" duties of each position. The Commissioner delegates certain duties to the Division Director. He summarized how he envisioned the legislation had been drafted. He noted that there are few items that the Division is responsible for which have a specific statutory directive. He asked what would happen to those situations delegated by statute to the Commissioner. Representative James understood that the Division of Agriculture is under Department of Natural Resources. She stated that the issues would instead be delegated to the Division of Agriculture. That Division would be managed by the Board of Agriculture with hired staff. She did not foresee anything changing. She commented that she did not know if there would be a need for a statutory change. Representative Green did not foresee a Board of Agriculture with any authority. Representative Austerman voiced his appreciation on all the work that Representative James had accomplished for agriculture business development. Representative J. Davies echoed his appreciation on that issue. He voiced concern with the option of the board hiring the director. He suggested that idea be revamped, as the current process works well. He stressed that the effect of the current practice has achieved the intent of the proposed legislation. He questioned if expanding the continuity of the director had been considered, because that action would make it more difficult for a governor to remove that director. Representative James responded that the issue had been considered regarding whether or not the removal of a board member could occur at the "pleasure of the Governor or for cause". She believed that the legislation would allow the removal for cause. In the original version of the bill, in order to accomplish that, the board would need to be approved by the Legislature. She noted that at the request of the Department, that clause was removed. Representative James maintained that there is an issue regarding the changing of directors and how that affects the Board of Agriculture. She maintained that a change in policy, which comes with a change in director, is difficult. She stressed the need to provide a continuity of policy and did not believe that the comparison with the Board of Forestry was relevant. Representative Grussendorf questioned if changing the statutes would cause constitutional problems in the Governor's power to appoint. Representative James responded that there are some similarities to the Alaska Seafood Marketing Institute Board (ASMI). She emphasized that the concept is how to guarantee continuity of policy. ROB WELLS, BOARD OF AGRICULUTRE AND CONSERVATION, MATSU, (TESTIFIED VIA TELECONFERENCE) expressed concern with the legislation. He acknowledged the intent to bring continuity and policy between Administrations and to allow farmers to control their own entity by managing the revolving loan fund. He referred to an audit by the Legislative Budget and Audit Committee (LBA) from two years ago. Mr. Wells noted that the audit found that the Board is conservative realizing that most of the Division functions are funded from the ARLF. He noted, for the record, that there is concern with the delegation of authority. He advised that the sponsor statement notes that duties of the Division will be transferred to the Board. Mr. Wells added that the three-year appointments could be problematic. He suggested that the current Governor would appoint all members. There could be a change of 6 members in one year, which would most likely result in that Board choosing a new director. Such action would remove the continuity that the sponsor is seeking. Mr. Wells voiced concern with members who have loans, being able to sit on the Board. He suggested such action could warrant members being questioned through the Executive Ethics Act. Mr. Wells agreed with Representative James that the interest income raising and falling would affect revenue. He voiced concern with the constitutional powers of the Governor. A Board should control the State assets in the revolving loan fund, an action still requiring an annual budget. It would no longer need to be an inline provision. Mr. Wells questioned, under the new structure, if an appeal could be made. He reiterated his concern regarding how this would function in today's world. JAMES BALDWIN, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW, noted that he had reviewed the bill for the Administration. He spoke to the concept of the legislation placing an independent board over a line agency. He commented that there is a constitutional argument to be made, indicating such action should not be allowed to happen under the current framework. In A.S., Article #3, it clarifies that premise. There is one instance, that you would be allowed to have a multi member board be at the head of a principle department, but in that instance, the Governor would be allowed to approve the Executive Director hired by that board. It would not be legal to take a small discrete section of a department and do that. Divisions are not mentioned in most statutes, as they are an unassigned function. Mr. Baldwin noted that an instance of making a division director as an appointee of a division board is an unusual concept, however, he noted that there have been compromise situations. Mr. Baldwin mentioned that if such provisions were in law, it would be very difficult to remove that board member. He mentioned that there could be problems with imbezzilment and/or responsibility to State agencies. Mr. Baldwin reiterated that it is difficult to enforce a for-clause provision. Mr. Baldwin continued, a "for-clause provision" recognizes that certain individuals have property rights in office. That type of board member does not have a salary but does have a "term of office". That term is staggered which could present a problem. He stressed that continuity is important in government, but the problem arises when trying to determine how to fix responsibility for governments actions. The manner, in which the Alaska Constitution does it, is by making the Governor responsible. The concern is that the State of Alaska has "government by board" to run things locally, but with statehood, the State opted that the Governor be the responsible party for how government operates. At present time, one or two people are responsible. Mr. Baldwin stated that the proposed concept would be erosion back to the old unworkable ways. He urged that the Committee not adopt the legislation. Mr. Baldwin spoke to the "conflict of interest" clause, which is not that much different from what currently exists. He referenced Page 2, Line 20, noting concern with the wording "affects that lease, permit or loan". He commented that language was "loose" and would cause problems. Representative James responded to where the board would sit in the "scheme" of things. She pointed out that those involved in the agriculture industry fear that the ARLF is not spending funds appropriately. "A government does not shrink itself by nature". Representative James advised that the Commissioner would supervise the activity. She pointed out that all decision making power of the Director would go into the Board of Agriculture. That would result in taking the authority from one person and putting it into a board. She noted that a joint group of people would be implementing the intent of the Commissioner. Representative James indicated that the legislation would enhance the agricultural activities of the State. She noted that regulations and policies would be drafted according to the statutes. Policies are looser and need to be treated equally over time. She acknowledged that it would be an experiment. (TAPE CHANGE, HFC 00 - 35, SIDE 2). Representative James emphasized that the allocation of duties would be fairly distributed. Co-Chair Therriault noted that HB 116 would be HELD in Committee for further consideration.
Document Name | Date/Time | Subjects |
---|